Issues: (i) Whether an OTS between a personal guarantor and the sole financial creditor can bring the corporate debtor out of liquidation; (ii) Whether forfeited earnest money deposit previously received by the financial creditor must revert to the liquidation estate after its debt is settled; (iii) Whether payment of remuneration to the erstwhile liquidator from the liquidation estate is valid; and (iv) Whether the admitted operational creditor is entitled to distribution and the personal guarantor can claim priority as a financial creditor.

Issue (i): Whether an OTS between a personal guarantor and the sole financial creditor can bring the corporate debtor out of liquidation.

Analysis: A bilateral settlement with a financial creditor does not displace the statutory liquidation process. Exit from liquidation is available only through the legally recognised routes, including a scheme under Section 230 of the Companies Act, 2013, or sale of the corporate debtor as a going concern. The separately ratified transfer of assets, treated as a private sale after unsuccessful auctions and on value-maximisation considerations, was left undisturbed.

Conclusion: The OTS did not terminate or alter the liquidation process, and no interference was warranted with the ratified asset transfer.

Issue (ii): Whether forfeited earnest money deposit previously received by the financial creditor must revert to the liquidation estate after its debt is settled.

Analysis: The forfeited earnest money deposit constituted an asset of the liquidation estate. Once the financial creditor accepted the OTS amount and issued an account-closure certificate, its claim stood satisfied and it retained no entitlement to the forfeited amount. The amount was consequently required to be restored to the liquidation estate for distribution under Section 53 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The forfeited earnest money deposit was required to be returned to the liquidation estate and could not be retained by the financial creditor.

Issue (iii): Whether payment of remuneration to the erstwhile liquidator from the liquidation estate is valid.

Analysis: The erstwhile liquidator had undertaken claim processing, conducted auctions, pursued applications, and represented the corporate debtor in connected proceedings. The monthly remuneration had been fixed during the insolvency process and continued during liquidation; the reduced amount allowed was supported by the unchallenged computation and work performed.

Conclusion: Payment of the approved remuneration to the erstwhile liquidator from the liquidation estate was valid.

Issue (iv): Whether the admitted operational creditor is entitled to distribution and the personal guarantor can claim priority as a financial creditor.

Analysis: The operational creditor's claim had been lodged during the insolvency process, updated after liquidation commenced, admitted by the liquidator, and reported to the relevant authorities. Payment by the personal guarantor to settle the financial creditor's dues did not effect an assignment of debt or substitute the guarantor as a financial creditor. As purchaser of assets or promoter, the guarantor had no priority claim over the liquidation estate and could receive any surplus only after statutory claims were satisfied under Section 53 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The admitted operational creditor was entitled to distribution under the statutory waterfall, and the personal guarantor had no priority entitlement as a financial creditor.

Final Conclusion: The liquidation estate, including forfeited earnest money deposit, remains available for settlement of liquidation costs and admitted stakeholder claims in accordance with the statutory waterfall.

Ratio Decidendi: A personal guarantor who settles the corporate debtor's financial debt under an OTS does not, absent assignment or substitution, become a financial creditor entitled to liquidation-estate proceeds, which must be distributed under the statutory waterfall after the financial creditor's claim is satisfied.

Issues: Whether the extended period of limitation for recovery of service tax could be invoked for the period 2015-16.

Analysis: Section 73 of the Finance Act, 1994 permits invocation of the extended limitation period only where suppression, wilful misstatement, fraud or like conduct is established. The relevant receipts and taxable transactions had been disclosed through VAT returns and ST-3 returns, and the original adjudicating authority had evaluated those records while dropping the proposed demand. The material did not establish suppression of facts, wilful misstatement or fraud. Therefore, any demand could only fall within the normal limitation period. The show cause notice dated 24.12.2020 for the period 2015-16 was wholly time-barred.

Conclusion: The extended period of limitation was not invocable, and the service tax demand was barred by limitation.

Issues: (i) Whether the project-level anti-profiteering methodology, using purchase value to quantify additional input tax credit and allocating savings per square foot, complied with the remand directions; (ii) Whether unavailed pre-GST CENVAT credit on input services could be notionally set off against post-GST input tax credit; and (iii) Whether GST on the additional realisation and interest were validly included in the recoverable amount.

Issue (i): Whether the project-level anti-profiteering methodology, using purchase value to quantify additional input tax credit and allocating savings per square foot, complied with the remand directions.

Analysis: The governing methodology for real-estate projects rejects a comparison of input tax credit with turnover because construction expenditure, credit accrual and buyer collections do not have a direct correlation throughout a project. It requires the total GST-related saving for the project to be determined and allocated over the total project area to derive a uniform per square foot benefit. The revised computation quantified the additional input tax credit against project purchase value, determined the project-level saving, divided it by total area, and applied the resulting per square foot figure to the sold area. Purchase value was used to measure credit against project expenditure, not as a substitute for turnover or for allocating benefit according to buyer collections. Judicial review under Articles 226 and 227 does not permit replacement of a fair and reasonable factual computation accepted by the specialised Tribunal absent jurisdictional error, manifest illegality or non-compliance with the binding remand directions.

Conclusion: The methodology was consistent with the remand directions and was validly sustained, against the assessee.

Issue (ii): Whether unavailed pre-GST CENVAT credit on input services could be notionally set off against post-GST input tax credit.

Analysis: Section 171 of the Central Goods and Services Tax Act, 2017 concerns the benefit of input tax credit actually accruing to the supplier and its passing on to recipients. The pre-GST returns recorded nil CENVAT credit actually availed, while substantial GST input tax credit was availed after GST. A credit that was only legally available but remained unclaimed cannot be treated as having reduced the pre-GST tax incidence, since that would compare actual post-GST benefit with a hypothetical pre-GST benefit. The benefit was not restricted to credit on goods, as the post-GST credit on input services was also actually availed.

Conclusion: Unavailed pre-GST CENVAT credit could not be notionally set off against the post-GST input tax credit; the determination based on actual availment was upheld, against the assessee.

Issue (iii): Whether GST on the additional realisation and interest were validly included in the recoverable amount.

Analysis: GST collected on the enhanced consideration resulting from non-passing of the tax benefit forms part of the profiteered amount because it represents tax collected on the additional realisation. The direction to pay interest at 18% was part of the statutory anti-profiteering consequence, and no independent jurisdictional infirmity was established.

Conclusion: Addition of GST at 12% to the profiteered amount and the direction for interest at 18% were valid, against the assessee.

Final Conclusion: The project-specific calculation founded on actually availed incremental input tax credit, allocated on a per square foot basis and inclusive of GST collected on the excess realisation, remains enforceable with interest payable to the affected recipients.

Ratio Decidendi: In real-estate anti-profiteering proceedings, incremental input tax credit actually availed after GST must be determined as project-level savings and allocated by area; unavailed pre-GST credit cannot be imputed as a notional offset.

Issues: Whether imposition of tax and penalty under Section 129 of the Central Goods and Services Tax Act, 2017 was justified where the e-way bills had expired and their validity was not extended under Rule 138 of the Central Goods and Services Tax Rules, 2017.

Analysis: Section 129 permits demand of tax and penalty for contraventions during transportation, while Rule 138(10) prescribes the validity period of an e-way bill. Circular No. 64/38/2018-GST distinguishes serious and substantive contraventions from minor or procedural lapses. The consignment was accompanied by invoices, lorry receipt, e-way bills and a test certificate; the invoices charged integrated tax and physical verification disclosed no discrepancy in the goods. Expiry of the e-way bills was the sole defect, and no tax evasion or intention to evade tax was established. The explanation for the incorrect destination entry and consequential validity period was relevant while deciding whether Section 129 could be invoked.

Conclusion: Invocation of Section 129 of the Central Goods and Services Tax Act, 2017 for the expired e-way bills was invalid and unjustified; the levy of integrated tax and penalty was set aside.

Issues: Whether statutory interest consequential to confiscation and redemption of imported goods may be computed from the original assessment of the Bill of Entry when the liability arising from the confiscation proceedings was determined only by a subsequent adjudication order.

Analysis: Under Section 125(2) of the Customs Act, 1962, the obligation to pay duty and charges consequent upon redemption arises in the context of exercise and acceptance of the redemption option. The resulting duty liability is required to be assessed and determined through the machinery of Section 28 of the Customs Act, 1962, after which statutory interest may apply in accordance with law. The original assessment was based on the declared description of the goods, whereas the goods were seized and the description, classification, confiscation consequences, redemption fine, penalties and duty consequences were determined only through the adjudication order dated 28.02.2023. Delay in adjudication does not by itself extinguish statutory interest; however, a liability that had not yet been determined cannot be treated as an amount in delayed payment for the preceding period.

Conclusion: Interest could not be computed for the period from the original assessment in May 2015 until 28.02.2023. The interest liability must be recomputed from the date of determination under the adjudication order, after accounting for the subsequent reassessment and payments or appropriations already made; interest for the subsequent period remains payable if attracted under the applicable law.

Issues: Whether penalty upon a director under Section 112(a) of the Customs Act, 1962 was sustainable where the imported goods were not available for confiscation or imposition of redemption fine, and the duty demand against the importer arising from the same order had already been set aside.

Analysis: Penalty under Section 112(a) requires an act or omission rendering goods liable to confiscation under Section 111. Although the adjudication order recorded that the goods were liable to confiscation under Section 111(m), no redemption fine under Section 125 was imposed because the goods were not physically available. The duty demand and penalties against the importer, founded on the same reclassification, had also been set aside in the importer's appeal. These circumstances left no legal basis for fastening penal liability upon the director.

Conclusion: The penalty imposed upon the appellant under Section 112(a) of the Customs Act, 1962 was unsustainable.

Issues: (i) Whether AED (GSI) credit paid on unprocessed nylon tyre cord fabric could be availed and utilised towards basic excise duty where the intermediate TCWS was exempt from AED (GSI) and tyres were not chargeable to AED (GSI); (ii) Whether refund of AED (GSI) credit was available for inputs used in exported tyres.

Issue (i): Whether AED (GSI) credit paid on unprocessed nylon tyre cord fabric could be availed and utilised towards basic excise duty where the intermediate TCWS was exempt from AED (GSI) and tyres were not chargeable to AED (GSI).

Analysis: Rule 57C of the Central Excise Rules, 1944 denied credit on inputs used in manufacture of exempt or nil-rated final products. The second proviso to Notification No. 5/94-C.E. (N.T.) dated 01.03.1994 confined AED (GSI) credit to payment of excise duty leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, on final products. TCWS was exempt from AED (GSI), while tyres were not chargeable to AED (GSI); consequently, no dutiable final product under that enactment existed against which the credit could be utilised. The subsequent CENVAT amendment and circular could not apply to the 1998-99 period. The retrospective amendment under Section 88 of the Finance Act, 2004 applied only to AED (GSI) paid on or after 1 April 2000.

Conclusion: The assessee was not eligible to avail or utilise AED (GSI) credit towards basic excise duty. The issue is decided against the assessee.

Issue (ii): Whether refund of AED (GSI) credit was available for inputs used in exported tyres.

Analysis: Refund under Rule 57F(13) depended upon valid entitlement to the underlying AED (GSI) credit. Since the credit itself was unavailable under Rule 57C and Notification No. 5/94-C.E. (N.T.) dated 01.03.1994, export of the tyres did not create entitlement to refund of that credit.

Conclusion: The assessee was not entitled to refund of the disputed AED (GSI) credit. The issue is decided against the assessee.

Final Conclusion: AED (GSI) credit under the MODVAT regime could be used only against liability under the same additional-excise-duty enactment; later CENVAT provisions did not alter the position for the earlier disputed period.

Ratio Decidendi: Credit of a specified additional excise duty is unavailable where no final product is liable to that duty, and cannot be diverted towards payment of a different excise duty unless the governing credit scheme expressly permits it.

Issues: Whether the writ petition could be maintained despite the appellant's failure to challenge the portal-uploaded notice and final tax order through the available statutory remedy.

Analysis: The appellant acknowledged receipt of the notice through the portal but asserted, without corroboration, that it had not seen the notice or the consequential order until recovery proceedings commenced. Any objection that the notice was only an electronic summary or lacked required particulars ought to have been raised by a timely reply before the final order was made. The appellant's continued inaction, particularly when it had accessed the portal for input tax credit purposes, did not justify invoking writ jurisdiction after the final order.

Conclusion: The rejection of the writ petition for non-availment of the alternative statutory remedy was upheld; the appellant could not challenge the notice and final order on the asserted ground after remaining silent during the proceedings.

Issues: (i) Inclusion of Ideavate Solutions Pvt. Ltd. after exclusion of key management personnel remuneration from its related-party-transaction computation; (ii) Inclusion of Toxsl Technologies Pvt. Ltd. as a functionally comparable company; and (iii) Retention of Great Software Laboratory Pvt. Ltd., Consilient Technologies Pvt. Ltd., Systango Technologies Ltd. and Ksolves India Ltd. as comparable companies.

Issue (i): Inclusion of Ideavate Solutions Pvt. Ltd. after exclusion of key management personnel remuneration from its related-party-transaction computation.

Analysis: Under the Transactional Net Margin Method, comparables must satisfy the related-party-transaction filter. The directions required exclusion of key management personnel remuneration from Ideavate's related-party-transaction computation. The annual-report material showed that, after this exclusion, Ideavate satisfied the filter and had no related-party transactions for the relevant year.

Conclusion: Ideavate Solutions Pvt. Ltd. shall be included in the final set of comparables after excluding key management personnel remuneration from the related-party-transaction computation.

Issue (ii): Inclusion of Toxsl Technologies Pvt. Ltd. as a functionally comparable company.

Analysis: Functional similarity is the governing criterion for selection of a comparable under the Transactional Net Margin Method. The material and the co-ordinate decision relied upon treated Toxsl as a provider of software development services, and no contrary material was produced.

Conclusion: Toxsl Technologies Pvt. Ltd. shall be included in the final set of comparables.

Issue (iii): Retention of Great Software Laboratory Pvt. Ltd., Consilient Technologies Pvt. Ltd., Systango Technologies Ltd. and Ksolves India Ltd. as comparable companies.

Analysis: The cited decisions treated companies performing diversified, specialised or high-end activities, including product-related functions, as functionally dissimilar to a routine software-services provider. The corrected direction requires application of those decisions while examining the assessee's functional-comparability claim regarding the four companies.

Conclusion: The AO/TPO shall follow the cited decisions in deciding the functional-comparability claim and exclude the four companies if the claim is found correct.

Final Conclusion: The transfer-pricing benchmarking exercise requires recomputation after inclusion of Ideavate and Toxsl and after the directed determination concerning the four disputed comparables.

Ratio Decidendi: Under the Transactional Net Margin Method, comparable selection must apply the related-party-transaction filter consistently and be founded on functional similarity; entities performing materially diversified or specialised functions cannot be retained where functional dissimilarity is established.

Issues: (i) Whether interest earned by a foreign portfolio investor on rupee-denominated non-convertible debentures issued by Indian companies qualifies for the concessional tax rate under Section 194LD of the Income-tax Act, 1961; (ii) Whether the addition arising from denial of concessional taxation of interest claimed under Section 194LC of the Income-tax Act, 1961 can be sustained where the objection remained unaddressed by the DRP and the final assessment order referred only to Section 194LD.

Issue (i): Whether interest earned by a foreign portfolio investor on rupee-denominated non-convertible debentures issued by Indian companies qualifies for the concessional tax rate under Section 194LD of the Income-tax Act, 1961.

Analysis: Section 194LD extends the benefit to interest on a rupee-denominated bond of an Indian company. The statutory definitions of interest and interest on securities under Sections 2(28A) and 2(28B) show that interest arises from moneys borrowed or debt incurred and includes interest on debentures and other securities issued by a company. As bonds and debentures are debt instruments, the distinction sought to be drawn between rupee-denominated bonds and NCDs was immaterial. External materials such as press releases, parliamentary debates and regulatory materials could not displace the statutory scheme. The NCDs were rupee-denominated instruments held by a registered foreign portfolio investor, and the other conditions under Section 194LD were undisputed.

Conclusion: Interest on the rupee-denominated NCDs qualified for the concessional tax rate under Section 194LD of the Income-tax Act, 1961. The issue was decided in favour of the assessee.

Issue (ii): Whether the addition arising from denial of concessional taxation of interest claimed under Section 194LC of the Income-tax Act, 1961 can be sustained where the objection remained unaddressed by the DRP and the final assessment order referred only to Section 194LD.

Analysis: The draft assessment order denied the benefits under Sections 194LD and 194LC on a consolidated amount. The objection concerning the denial under Section 194LC remained unaddressed by the DRP, while the final assessment order made the addition by referring only to Section 194LD and contained no reference to Section 194LC.

Conclusion: The addition relating to interest claimed as taxable under Section 194LC of the Income-tax Act, 1961 could not be sustained. The issue was decided in favour of the assessee.

Final Conclusion: The concessional tax treatment claimed for interest from the relevant rupee-denominated instruments was upheld, and the corresponding additions for both assessment years were deleted.

Ratio Decidendi: For Section 194LD of the Income-tax Act, 1961, a rupee-denominated debenture issued by an Indian company is a debt instrument within the expression rupee-denominated bond, where the statutory conditions for the concession are otherwise fulfilled.

Issues: Whether renewal of registration under section 12AB may be denied solely because a religious and charitable institution, created or established otherwise than under a formal instrument, does not furnish a trust deed or memorandum of association.

Analysis: Rule 17A(2)(a) applies where the applicant is created or established under an instrument, whereas Rule 17A(2)(b) expressly covers an applicant created or established otherwise than under an instrument. Treating a formal trust deed or memorandum of association as invariably mandatory would render clause (b) otiose. Registration particulars and certificates issued under the Maharashtra Public Trusts Act, 1950, along with other available material, are relevant to establish the institution's creation, establishment and continued existence. Such registration does not by itself establish entitlement to renewal, since satisfaction regarding the objects and genuineness of activities remains necessary; however, no independent adverse finding on those matters was recorded.

Conclusion: Absence of a formal trust deed or memorandum of association could not lawfully be the sole basis for denial of renewal where the institutions asserted that no such instrument ever existed and furnished material evidencing their establishment and functioning. Renewal under section 12AB was required to be granted.

Issues: Whether profit from futures and options transactions, already credited as business income and offered to tax, could again be assessed as unexplained cash credit under Section 68 by applying Section 115BBE(2) for Assessment Year 2015-16.

Analysis: Section 68 applies to an unexplained credit whose stated character is not satisfactorily established. The impugned futures and options profit had already been recorded in the profit and loss account and included in taxable income. Taxing that identical profit again under Section 68 would result in a duplicate addition; even if it were treated as income under that provision, its earlier inclusion as regular business profit would necessarily require exclusion. Further, the bar on deduction, allowance and loss set-off under Section 115BBE(2) was introduced with effect from 01.04.2017 and operated prospectively, and was therefore unavailable for Assessment Year 2015-16.

Conclusion: The addition of Rs. 28,30,800 under Section 68 was unsustainable and was directed to be deleted.

Issues: (i) Whether omission to levy interest under Section 234B could be rectified under Section 154; (ii) Whether a non-resident recipient holding a lower-deduction certificate under Section 197 was liable for advance tax and interest under Section 234B on income exceeding the certificate-covered estimate; (iii) Whether the amount of interest under Section 234B required recomputation.

Issue (i): Whether omission to levy interest under Section 234B could be rectified under Section 154.

Analysis: Section 154 permits rectification of an obvious and patent mistake, including in an earlier rectified order. Interest under Section 234B is mandatory once its statutory conditions are fulfilled and is not subject to discretion. Non-consideration of binding law declaring the applicable position constituted a mistake apparent from the record; the levy did not involve a debatable issue or an impermissible review.

Conclusion: The rectification under Section 154 to levy interest under Section 234B was valid, in favour of the Revenue.

Issue (ii): Whether a non-resident recipient holding a lower-deduction certificate under Section 197 was liable for advance tax and interest under Section 234B on income exceeding the certificate-covered estimate.

Analysis: Under Section 209(1)(d) and its proviso, tax deductible at source cannot be reduced in computing advance-tax liability where the relevant income was received without deduction of the legally deductible tax. A Section 197 certificate is a procedural authorisation for deduction at a lower rate based on projected income and protects only the income and tax covered by that certificate. It does not alter the recipient's obligation to revise its estimate of current income and pay advance tax under Sections 208 to 210 where assessed income exceeds the certified estimate or is recharacterised. The tax shortfall on such excess income could not be recovered from a payer complying with the certificate, and the recipient remained liable for the resulting advance-tax shortfall.

Conclusion: Interest under Section 234B was rightly leviable on the advance-tax shortfall relating to income beyond the scope of the Section 197 certificate, in favour of the Revenue.

Issue (iii): Whether the amount of interest under Section 234B required recomputation.

Analysis: The quantification of statutory interest required verification and computation in accordance with law after affording the assessee an adequate opportunity of hearing.

Conclusion: The Assessing Officer must recompute the interest under Section 234B in accordance with law, in favour of the assessee.

Final Conclusion: The validity of the rectification and the liability for interest on the uncovered assessed income remain intact, while the interest amount is to be redetermined lawfully.

Ratio Decidendi: A lower-deduction certificate under Section 197 is confined to the estimated income it covers and does not exempt a recipient from advance-tax liability or mandatory Section 234B interest on assessed income exceeding that estimate where tax was not deducted to the extent legally required.

Issues: (i) Whether consideration from offshore supply of goods was taxable as fees for technical services or fees for included services; (ii) Whether offshore support-service and reimbursement receipts were taxable as fees for technical services or fees for included services under Article 12(4) of the India-USA Double Taxation Avoidance Agreement; and (iii) Whether income-reversal claims founded on post-assessment settlements and credit notes could be entertained with additional evidence and required verification.

Issue (i): Whether consideration from offshore supply of goods was taxable as fees for technical services or fees for included services.

Analysis: The invoices and invoice-wise details identified specific goods, quantities and prices, without any separate charge or material indicating services, software licensing, or transfer of technical know-how. No evidentiary basis was established for recharacterising the consideration for offshore sale of goods as consideration for technical services or included services.

Conclusion: The offshore-supply consideration was not taxable as fees for technical services or fees for included services; this issue was decided in favour of the assessee.

Issue (ii): Whether offshore support-service and reimbursement receipts were taxable as fees for technical services or fees for included services under Article 12(4) of the India-USA Double Taxation Avoidance Agreement.

Analysis: Article 12(4) applies only where technical knowledge, experience, skill, know-how, or process is made available so that the recipient can apply it independently. Visa and immigration assistance, employee-relocation support, sales support, finance, accounting, payroll, HR, and other recurring administrative services were routine support functions and did not transfer any such capability to the Indian affiliates. The receipts therefore did not satisfy the make available requirement for fees for included services.

Conclusion: The offshore support-service receipts were not taxable as fees for technical services or fees for included services; this issue was decided in favour of the assessee.

Issue (iii): Whether income-reversal claims founded on post-assessment settlements and credit notes could be entertained with additional evidence and required verification.

Analysis: The appellate jurisdiction under Section 254 of the Income-tax Act, 1961 permits admission of additional claims, and Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 permits additional evidence where required for substantial justice. The restriction concerning a claim not made through a revised return applies to the Assessing Officer and does not curtail appellate jurisdiction. Under the real income doctrine, an amount that has not accrued or resulted as income cannot be taxed merely because of a bookkeeping entry. However, the settlement agreements, credit notes, and consequent reversals required factual verification.

Conclusion: The claims and additional evidence were entertainable in favour of the assessee on the procedural question, but the claims were remitted for verification and an independent decision on merits.

Final Conclusion: The additions treating offshore goods and routine offshore support receipts as taxable technical or included services cannot be sustained, while the claimed income reversals remain subject to factual verification.

Ratio Decidendi: Under Article 12(4), a service qualifies as a fee for included services only where it makes technical knowledge, skill, know-how, or a process available to the recipient for independent application; mere supply of goods or routine administrative support does not meet that threshold.

Issues: Whether the revision of the assessment under section 263 on the ground that depreciation claimed on concession rights should instead be amortised was valid.

Analysis: Revision under section 263 requires the assessment order to be both erroneous and prejudicial to the interests of the Revenue. The assessment record showed detailed and specific inquiries into the investment in the intangible asset and the depreciation claim, supported by responses and the concession agreement; consequently, the allegation of lack of inquiry was unsustainable.

Analysis: CBDT Circular No. 9/2014 concerns construction or development expenditure incurred by a BOT road or highway developer. The assessee had not constructed or developed the bridge, but had paid for a licence to collect toll and to operate and maintain the infrastructure during the concession period. The circular was therefore inapplicable. Further, depreciation and amortisation would only alter the timing of recovery of the cost, without causing revenue prejudice. The revisionary proceedings were also initiated on an audit objection rather than through an independent exercise of revisionary jurisdiction.

Conclusion: The revisionary order under section 263 was invalid, and the original assessment was restored.

Ratio Decidendi: Revision under section 263 cannot rest on a preference for amortisation over depreciation where the assessment followed due inquiry, the relied-upon circular does not apply, and no prejudice to the Revenue is established.

Issues: (i) Whether the reassessment initiated under Sections 147, 148 and 148A(a) of the Income-tax Act, 1961 was invalid for borrowed satisfaction and lack of independent application of mind; (ii) Whether disallowance of 25% of purchases recorded from a fictitious supplier was sustainable.

Issue (i): Whether the reassessment initiated under Sections 147, 148 and 148A(a) of the Income-tax Act, 1961 was invalid for borrowed satisfaction and lack of independent application of mind.

Analysis: The jurisdictional challenge had been rejected through categorical first-appellate findings. No infirmity was found in those findings despite the contention that the reassessment was based on information from the Insight portal and investigation wing without independent enquiry.

Conclusion: The reassessment was valid; against the assessee.

Issue (ii): Whether disallowance of 25% of purchases recorded from a fictitious supplier was sustainable.

Analysis: The purchases were treated as sourced through a fictitious, non-genuine entity. Where materials were in fact received but invoice purchases were shown from bogus suppliers, the purchase expenditure stood inflated and a reasonable part of the purchase price could be disallowed. The 25% rate followed in the assessment and confirmed in first appeal was found to require no interference.

Conclusion: The disallowance at 25% of the stated purchases was sustained; against the assessee.

Final Conclusion: The reassessment and the addition based on inflation in the stated purchases remain undisturbed.

Ratio Decidendi: Where goods are received but are shown as purchased from fictitious suppliers, disallowance of an appropriate part of the purchase price is permissible to account for inflation of expenditure.

Issues: Whether assessments under section 153C read with section 143(3), completed without issuance of a notice under section 143(2) after returns were filed in response to section 153C notices, were valid.

Analysis: Issuance of notice under section 143(2) was treated as a mandatory jurisdictional condition precedent where the returned income was subjected to assessment under section 143(3). Complete absence of such notice is not a procedural irregularity and cannot be cured by section 292BB. In the absence of a jurisdictional High Court ruling, the view favourable to the assessee among competing interpretations of the taxing provision was applied.

Conclusion: The assessments completed without issuing notice under section 143(2) were invalid and were quashed.

Issues: Whether, following the transition from VAT to GST in pre-existing works contracts, incremental GST may be reimbursed by the concerned employers and directions issued to tax authorities regarding the resulting tax liability.

Analysis: Under the GST statutory framework, statutory tax liability, assessment, recovery and enforcement must be determined in accordance with the applicable enactment. A works contract cannot alter that framework. The contractual allocation of the incremental tax burden arising from the VAT-to-GST transition is a matter between the contractor and the employer. Directions permitting revised returns or waiving statutory interest, penalty, or limitation contrary to the GST enactments cannot be issued to tax authorities.

Conclusion: Entitlement to reimbursement of incremental GST, if any, is to be determined between the contractor and the concerned employer; tax authorities cannot be directed to depart from the statutory GST regime.

Issues: (i) Whether the extended period under the proviso to Section 11-A(1) of the Central Excise Act, 1944 could be invoked for recovery of Additional Excise Duty; (ii) Whether the equivalent penalty founded on alleged suppression and intent to evade duty could survive.

Issue (i): Whether the extended period under the proviso to Section 11-A(1) of the Central Excise Act, 1944 could be invoked for recovery of Additional Excise Duty.

Analysis: The proviso is an exceptional limitation provision and requires the Revenue to establish fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. The disclosed manufacturing activity, the declaration furnished under Rule 174 of the Central Excise Rules, 1944, the claimed small-scale exemption, and departmental awareness of the unit negated deliberate concealment. Deficiencies in registration or declaration, and subsequent discovery of the quantum of clearances, did not by themselves establish wilful suppression or intent to evade. The contemporaneous uncertainty regarding liability to Additional Excise Duty also supported the bona fide nature of the assessee's understanding. The separate substantive question whether Additional Excise Duty was otherwise payable did not dispense with proof of the conditions for extended limitation.

Conclusion: The extended period was unavailable, and recovery for the period beyond normal limitation could not be sustained. This issue is decided in favour of the assessee.

Issue (ii): Whether the equivalent penalty founded on alleged suppression and intent to evade duty could survive.

Analysis: The penalty under Section 11-AC of the Central Excise Act, 1944 rested upon the same unproved allegation of wilful suppression and deliberate evasion that was necessary to sustain the extended period.

Conclusion: The equivalent penalty could not survive in the absence of established wilful suppression or intent to evade duty. This issue is decided in favour of the assessee.

Final Conclusion: Failure to establish the statutory preconditions for exceptional limitation removed the legal basis for the impugned fiscal demand and its accompanying penalty; the substantive applicability of Additional Excise Duty and marketability of the goods remained undecided.

Ratio Decidendi: Extended limitation for excise recovery is unavailable unless wilful suppression or other specified conduct coupled with intent to evade duty is established; mere non-registration, non-payment, or procedural omission does not suffice where the manufacturing activity was disclosed and the duty position was genuinely uncertain.

Issues: Whether recovery of drawback, initiated more than seven years after its payment under a rule containing no prescribed limitation period, was commenced within a reasonable period.

Analysis: Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 does not prescribe a limitation period for recovery of erroneously or excessively paid drawback; consequently, the recovery power must be exercised within a reasonable period having regard to the circumstances. There was no allegation of fraudulent availment or suppression of material facts, and no satisfactory explanation was furnished for initiating recovery more than seven years after the drawback had been availed.

Conclusion: The delayed recovery proceedings were not initiated within a reasonable period and were unsustainable; the recovery order was set aside and the drawback amount was directed to be refunded.